Paying with PHI: The Hidden Costs of Drug Company-Sponsored Patient Support Programs

58 Pages Posted: 16 Nov 2021

See all articles by Laura Karas

Laura Karas

Harvard University, Law School

Date Written: March 12, 2021


High specialty drug prices have spawned an ecosystem of financial and behavioral support services for specialty drugs, including copay support, reimbursement coordination, and nursing support intended to improve drug adherence. Increasingly, these services are bundled together in drug company–administered patient support programs (PSPs). Although drug manufacturers claim these programs are gratuitous, PSPs come at a cost: drug makers condition participation in PSPs on the provision of HIPAA authorizations that authorize the transfer of enrollees’ protected health information (PHI) from covered entities to the drug company and its affiliates. This Article illuminates for the first time in the literature the legal and ethical concerns raised by the exchange of PHI for drug access that occurs after patients enroll in PSPs and the manner in which PSP-derived data helps bolster unaffordable drug prices.

Once PHI is shared pursuant to a valid HIPAA authorization, drug makers — noncovered entities under HIPAA — face few limitations on downstream uses of that data. Moreover, PSP enrollment furnishes a drug maker with a granular, patient-provider linkage for every patient consuming its pharmaceutical product. Linked patient- and prescriber-identifying information may enable drug makers to target marketing to patients and healthcare providers with an otherwise unattainable degree of precision. This Article illuminates critical connections between PHI acquired through PSPs and several fraudulent and anticompetitive practices by pharmaceutical companies, and it ends by proposing concrete and practical revisions to HIPAA to modernize HIPAA’s privacy protections vis-à-vis PHI transferred from covered entities to noncovered entities such as drug makers.

Keywords: pharmaceutical drugs; privacy law; pharmaceutical marketing; product hopping; HIPAA

JEL Classification: I18, K32

Suggested Citation

Karas, Laura, Paying with PHI: The Hidden Costs of Drug Company-Sponsored Patient Support Programs (March 12, 2021). Columbia Science and Technology Law Review, Forthcoming, Available at SSRN: or

Laura Karas (Contact Author)

Harvard University, Law School ( email )

1563 Massachusetts Avenue
Cambridge, MA 02138
United States

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